Department of Labor takes additional steps to protect critical Affordable Care Act consumer protections through Association Health Plan Rule rescission

WASHINGTON – The Department of Labor today announced that its Employee Benefits Security Administration issued a final rule that will reinforce critical healthcare protections for consumers in plans offered by small employers or available for purchase on the individual market.

Aligned with the Biden-Harris administration’s goal to help more Americans enroll in quality health coverage, EBSA is rescinding the 2018 rule that expanded the availability of Association Health Plans, which do not need to comply with several critical consumer protections under the Affordable Care Act. In line with these efforts, the Biden-Harris administration also cracked down on junk insurance in a recent final rule on short-term, limited-duration insurance. 

Today’s final rule reverses lax criteria the Trump administration finalized that made it easier for a group or association of employers to be treated as the “employer” when offering multiple-employer group health insurance, which effectively allowed more employers to offer health insurance coverage that evades several critical ACA consumer protections. 

In 2019, the U.S. District Court for the District of Columbia largely invalidated the 2018 rule, finding certain provisions to be an unreasonable interpretation of the Employee Retirement Income Security Act. The decision stopped the rule’s full implementation.

“The Department of Labor now believes that the provisions of the 2018 Association Health Plan Rule that the district court held as inconsistent with the Administrative Procedure Act and in excess of the department’s authority are, at a minimum, not consistent with the best reading of the statutory requirements governing group health plans,” explained Assistant Secretary for Employee Benefits Security Lisa M. Gomez. “Moreover, today’s action is consistent with the President’s directive to improve the comprehensiveness of coverage and ensure that consumers have access to quality coverage that is consistent with federal law.” 

The department is rescinding the entire 2018 rule to resolve any uncertainty about the status of the standards the rule established, leaving in place longstanding pre-rule AHP guidance that numerous judicial decisions have consistently supported and relied upon.